Fonterra staff may trade shares

TIM HUNTER
Last updated 05:00 08/12/2012

Relevant offers

Farming

Demand for pizzles pushes deer exports up Cherry crop light, but bigger fruit Rising to high country challenge Walkers come across grisly find Rural mum becomes entrepreneur Profitability defines rural land use Smart feeding breeds winners Fonterra plans farm investment fund Dairy farmers brace for tougher times Westland Milk slashes payout forecast to $5

Fonterra has waived a ban on staff trading units in its new Shareholders Fund after a rush to sell into the soaring market post listing.

In an email sent on Thursday, Fonterra chief financial officer Jonathan Mason told staff the company's securities trading policy prohibited buying and selling within six months.

However, the policy was being waived until December 20 "because [Trading Among Farmers] is new so that staff may not have been aware of the policy requirement not to engage in short-term trading, and because staff, when applying for units, may not have expected that they would receive their full allocation, which may have created financial hardship."

More than 1300 Fonterra staff bought units in the Shareholders Fund at $5.50 each through the Friends of Fonterra offer. It appears the Friends were the only investors to receive as much stock as they asked for.

Other buyers - institutions and clients of broking firms - are understood to have had their allocations drastically scaled back to 10 per cent or less of the quantity requested.

Trading in the stock opened on the NZX at $6.66 on November 30 and the price quickly rose to $6.90, delivering a windfall to short-term sellers.

The temporary waiver on short-term trading applies only to staff who don't have access to material inside information.

In the email, Mason said the ban on short-term trading was intended to discourage speculative trading by staff. It was put in place when the board approved Trading Among Farmers, which changed the co-operative's capital structure and introduced the Fonterra Shareholders Fund.

The fund units were trading at $6.65 late yesterday.

Ad Feedback

- BusinessDay.co.nz

Special offers
Opinion poll

Is it time for authorities to introduce tougher penalties for poaching?

Yes

No

Vote Result

Related story: Booby traps for poachers cost farmers

Featured Promotions

Sponsored Content

rural digi editions 4/9

Digital editions

Read our rural publications online